Tuesday, September 21, 2021

Contract remedies again prove broader than false advertising for pandemic-related suits

In re Columbia Tuition Refund Action, No. 20-CV-3208 (JMF) & 20-CV-3210 (JMF), --- F.Supp.3d ----, 2021 WL 790638 (S.D.N.Y. Feb. 26, 2021)

These are two putative class actions against Columbia and Pace based on allegedly broken promises due to the pandemic. “The cases are not formally consolidated, but the Court addresses the two motions together because they raise similar issues.” The claims survive only to the extent that they plausibly alleged violations of specific contractual promises for particular services or access to facilities.

Thus, some but not all breach of contract claims survived. For example, plaintiffs failed to plead that Columbia made a specific promise of exclusively in-person instruction. “[R]eferences to classroom locations and physical attendance requirements in Columbia’s syllabi, departmental policies and handbooks, and course registration portal … merely memorialize the pre-pandemic practice; they offered no guarantee that it would continue indefinitely.” References in Columbia’s marketing materials to “the on-campus experience” were often mere puffery “too vague to be enforced as a contract,” such as a statement in a University publication that “Columbia is an in-person kind of place.”

However, the instructional format claim against Pace survived because the plaintiff alleged that the course registration portal on Pace’s website stated that “[o]n-campus” courses would be “taught with only traditional in-person, on-campus class meetings.” On a motion to dismiss, it was ambiguous whether Pace’s disclaimer that “unforeseen circumstances may necessitate adjustment to class schedules” and that “[t]he University shall not be responsible for the refund of any tuition or fees in the event of any such occurrence .... Nor shall the University be liable for any consequential damages as a result of such a change in schedule” applied to a shift online.

And the Columbia plaintiffs did plead that Columbia breached a contract to provide access to certain campus facilities and activities in exchange for mandatory student fees. Resolving this claim involved no intervention into academic judgment, and bad faith was not an element. So too for similar Pace claims. But unjust enrichment wasn’t available where it merely duplicated the contract claims, and conversion also wasn’t available.

NYGBL 349 and 350:  Plaintiffs failed to allege that the universities’ representations were materially misleading. “Plaintiffs cite, and the Court has found, no case holding that a plaintiff can state a claim under Section 349 or 350 where the defendant neither knew nor could have known that its commercial acts or practices were false.” [A reversal of the usual result: contract claims are usually much narrower than unfair trade practices claims.]

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